Page 116 - Azerbaijan State University of Economics

Bryan Davis: State owned enterprises: Chinese fdi in Canada via the lenses of perceptual, political,
economic and social considerations

1. Encourage stakeholder involvement in investment deals to develop win-win outcomes

for Chinese investors and Canadian companies. Foster a supportive investment environment

engaging community stakeholders to create investment initiatives that have community support.

2. Establish strong economic and social relationships with municipal and provincial

governments and ensure that the economic benefits of investments are well communicated.

3. Bridge the gap between different cultural business practices. Hire Chinese-proficient

staff at relevant governmental and quasi-governmental bodies to guide investments through the

right channels and bridge the business gap.

4. The Canadian government should take a more proactive approach to regulatory

compliance during FDI transactions. By effectively communicating regulatory standards, the

government can ensure detailed understanding of regulatory requirements on the part of the

Chinese SOE. The government can also provide initial guidance and support followed by

regular inspections to help build community confidence. Chinese investments in Canada should

also receive no less favorable treatment than that stipulated to any other country.

5. Make efforts to depoliticize the Canadian regulatory process over which the government

dictates the foreign investment deals chosen for approval. Politicization delays and raises the cost

of acquisition and in light of the recent delay to the Chinese SOE bid to acquire Nexen, Chinese

investors may be increasingly concerned that investments may continue to be hampered by

Canadian political restrictions – justified or otherwise.

6. The government should promote Canadian participation on the corporate and advisory

boards of Chinese SOEs. Given that a firm’s decisions are heavily influenced by its board

directors, it is in Canada’s best interest to have Canadians amongst the directors to ensure that

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Chinese SOEs operate in an ethical and sustainable manner.

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